Weak trading volume on the local stock exchange was caused by the Christmas holiday season, which has seen local and foreign institutional investors taking breaks from their work, Financial Supervisory Commission Chairman William Tseng (曾銘宗) said yesterday.
The TAIEX rose 0.47 percent to 8,363.28 as trading volume shrank to a new annual low of NT$40 billion (US$1.21 billion) this year, compared with NT$60 billion in the previous session.
With few trading sessions left in the year and average daily turnover estimated to remain at NT$117 billion, it is unlikely that Tseng’s annual turnover target of NT$120 billion to NT$130 billion would be reached.
It is normal to see both local and foreign institutional investors absent from the trading floor during holidays, Tseng told reporters ahead of an awards ceremony at the Joint Credit Information Center in Taipei.
“The removal of the capital gains tax on Friday [next week] will be a key catalyst to push the local bourse toward the turnover target,” Tseng said.
Hua Nan Securities Co (華南永昌證券) analyst Kevin Su (蘇俊宏) told CNA that yesterday’s trading volume was lower than the NT$55.8 billion on Christmas Day last year.
“I think that market sentiment has been haunted by political uncertainty ahead of next month’s presidential election, thus many investors appear reluctant to chase prices for now,” CNA quoted Su as saying.
It is no longer appropriate for the National Stabilization Fund to remain active, as the TAIEX has been holding above 8,000 points after it tumbled sharply to 7,410 points in August, Taiwan Institute of Economic Research (台經院) president Jeff Lin (林建甫) said earlier in the day.
Tseng declined to comment on the workings of the fund, saying only that he is not concerned about the TAIEX’s performance next year and expects trading momentum to pick up shortly after the international holidays.
As of Tuesday, foreign capital inflows totaled US$193.3 billion, compared with US$193 billion as of Thursday last week and US$194.5 billion as of Nov. 30, according to the commission’s data.
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